Consider gender factor when choosing a super fund

One in three women retire with nothing at all, while the average man retires with 42 per cent more superannuation than the average woman.

Balancing work and a role as a stay-at-home mum is impacting the ability of women to have enough superannuation for retirement.Credit:Shutterstock

While no single decision will tilt this playing field back in their favour, new research suggest a small, practical step for women looking to boost their super balances is to choose a fund which has a greater representation of women on the board and in its leadership team.

Research by Rainmaker Information, the publisher of the superannuation comparison service SelectingSuper, shows funds with above-average levels of gender diversity in leadership achieved returns of 9.6 per cent a year and 8 per cent per annum over one and three years, respectively. That compared to 8.7 per cent and 7.6 per cent, respectively, for funds that do not.

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Funds with a high percentage of women in their leadership had a 71 per cent incidence of outperformance over the three years to June 2018, compared with a 47 per cent incidence of outperformance for funds with low female leadership representation.

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It’s compelling proof that diversity in the leadership team and/or board can improve the bottom line for fund members.

Aside from potentially boosting individual balances, the research will, hopefully, trigger change to ensure there is better diversity around the tables of more super funds.

Still, it appears the most effective way to retire with insufficient superannuation is to be a woman.

Given the backdrop of working patterns in Australia, women work less and earn less over the course of their lives, which is reflected in the smaller pots of gold women can reach for in retirement.

Some might argue this is fair enough. If women work and earn less why should they have the same amount of money at the end as men?

Gender pay gap

The answer is there are myriad structural factors that lead to both women earning less and working less that are beyond the confines of choice. Women engage in less paid work than men because they are doing far more unpaid work.

The ability for women to work for money after the arrival of a child is hampered by the absence, in the majority of cases, of generous and equitable parental leave policies, as well as the unavailability and unaffordability of childcare.

In countries where parents, not just mothers, have access to both of these policies the participation of women in the workforce increases accordingly and the gender pay gap shrinks.

Women are far more likely to work part-time than men. Not simply because they don’t want to work more or because they’re not open to earning more but because other demands — from cooking and cleaning to baby-rearing to caring for elderly relatives — preclude them from working more.

In financial terms, this comes at great cost that is compounded over time.

And that’s before we consider that, as a general rule, women earn less than men in almost every sector and profession.

The most recent analysis of pay data by the Workplace Gender Equality Agency and the BankWest Curtin Economics Centre revealed that the wage gap between the top paid men and women in Australia is $160,000 a year.

It found the highest paid 10 per cent of men take home a total salary of at least $598,745, compared with $436,639 for the highest paid 10 per cent of women.

This is very close to "like for like" from which we can either deduce one of two things.

Structural factors

Either men are so much better than the women in similar jobs that they deserve an additional $160,000 each year or, alternatively, there are structural factors at play that are skewing the pay cheques in favour of men.

Suggesting to individual women that they can overcome the gap in retirement savings by simply becoming "better educated" or making "better choices" is what led the Australia Institute's chief economist Dr Richard Denniss to create and share his own advice.

1. Don’t work in a caring profession.

2. Don’t take time out of work while you’re young.

3. Don’t take time out of work while you’re older.

4. Don’t be a woman.

Outside of these options, the power of any individual woman to "beat the odds" is limited.

Dismantling the systemic problems that entrench the gender gap — during work and retirement — is essential.

Identifying and addressing the pay gap within an organisation, paying superannuation while employees are on unpaid leave and being intentional about boosting the representation of women in senior roles are all practical initiatives employers can take.

More broadly, improving public infrastructure, such as parental leave policies and the provision of childcare, in a manner that doesn’t just help families blend work and home, but promotes and facilitates a more equitable balance, is critical.

Until a seismic shift occurs, women will be left at the mercy of an uneven playing field.

Georgina Dent is a journalist, editor and TV commentator with a focus on women, empowerment and gender equality.